Alvie explains —___________. How if appears = “Modus Operan F ° R SAI LE Parti The Lesion Modus Operandi ‘Underlying Accou Assels ™ ee ca Portfolio) Reality Deus ¥ = - om eee eee Underlying PH Collateral ux PH Ser Tangible ee Intangible eseHow if appeared to you Originating Lender Apply for Line of Credit (Potential Lender) _——_—_—_—_—_—_——— (Obligee?) FOR SALE The Lesion It Started out like this Extend Line of Credit Originating Len (Obligeel) Tndentured by: PH Indebtedness. 1 ! Governing law: | Deed of Trust & Law Tangible 1 oflocal juisdiction Instruments ' Security “The hvo separate coniacts began om anil paper, eventhough i may have been created ona const ‘The bwo separate contacts are goveaned by different lis. a. Nole~ Article 3, b, Deed of Trust, Lien ~ Deed of Tit, law oflocal piedictionAnd could also have occurred Like this Inthe tangible world, if the Obligee chooses to sell mortgage loans, An Obligee would identify assets it wants to remove fiom the “balance sheet” to “pool” a potential homeowner(s)(PH) loan with other PH loans. Such pooling processes have underwriting standards set in place for creating this type of seference poutfolio. In doing so, the asset originator “Obligee” could be a “seller” of these pooled PH loans These portfolios are stmetnred in varions tranches by rating agencies “Reference Portfolio” (PH loans) Underlying Collateral x 100 Ye Rating == Value? (PH loans) (PH loans) (portfolio) “Pooled” PH loans This is only provided to get your mind back to thinking in the paper world of doing things. And could also have occurred like this. (cont) As a Tinst Certificate is the ultimate goal of a wayfarer in the tangible primary market Movement of all instruments have various different laws according to the instrament whether it be the contract between the party(s), creation of a trust, creation of a lien they all are govemed by negotiation of a Note, transfer of a security or transfer of a her some certain law accordingly. in sequence or in parallel, A law must be followed to make it lawful. “Reference Portfolio” (PH loans) Underlying Collateral x 100 Ye Rating == Value? (PH loans) (PH loans) (portfolio) “Pooled” PH loans This is only provided to get your mind back to thinking in the paper world of doing things.